BL Premium reports that the International Monetary Fund (IMF) has again reiterated the importance of addressing SA’s fiscal trajectory and promoting private sector-led investment in driving economic growth and employment.  

In a statement following meetings with the government earlier this month, the IMF repeated its view on the remedies required to fix the country’s broken economy and unsustainable fiscal path.  “As per our previous advice, creating conditions to boost private investment, redefining the role of the public sector in network industries to facilitate competition, and tightening fiscal policy to rein in rapidly increasing debt are imperative,” the IMF exhorted.  Once again, the country’s bankrupt, inefficient and corruption-plagued state-owned enterprises (SOEs) came under the spotlight:  “Special attention should be given to improving the efficiency of SOEs and the quality of their services by hardening their budget constraints and undertaking well-defined strategic equity partnerships, particularly in the energy sector.”  The IMF underscored the need for “bold action” to redefine Eskom’s business model.  But, the government appears not to be listening, having recently allocated R10.5bn to revive SA Airways but then claiming it did not have funds to buy much-needed Covid-19 vaccines.  The IMF also noted that the pandemic had exposed and contributed to the “vulnerabilities” of the SA economy that existed before Covid-19, referring thereby to the extreme levels of inequality and unemployment that plagued the country.

• Read the full original of the report in the above regard by Warren Thompson at BusinessLive (paywall access only)

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